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Millennials Dominate P2P Platform as Both Lenders and Borrowers: Study

  • Bengaluru, Mumbai and Hyderabad – top cities in terms of both borrowing and lending  
  • Medical emergencies during the pandemic was the top reason for borrowing followed by advance salary and family functions 
  • Up to 25,000 is the most preferred ticket size among borrowers 
  • 50k to 1lakh is the most preferred investment range among investors 
  • Salaried professionals — CXOs to mid-managerial level topped the chart as investors  
  • November, December and February witnessed peak in demand for loans 

Millennials dominate as the most influential cohort as both borrowers and lenders on peer-to-peer (P2P) lending platforms, says study. LenDenClub, the country’s largest P2P lending platform, released its 2020-21 report on the key borrowing and lending behaviour of its consumers (borrowers and lenders). 

According to the report by LenDenClub, young and tech-savvy Indians are much ahead of the previous generations when it comes to borrowing or even availing the platform for a new asset class as an investor. According to the report released by LenDenClub, millennials belonging to the age group of 21-30 years were the most active as both borrowers (56%) and lenders (54%) on its platform. This was followed by the cohort belonging to the age group of 31-40 years accounting for 37% in case of borrowers and 33% in case of lenders.  

India’s silicon city, Bengaluru, topped the chart in terms of people having the highest credit demand. Interestingly, the highest number of lenders too hailed from the tech city of Bengaluru. Other major lending and borrowing markets were Mumbai, Hyderabad, Pune and Chennai, showing a clear dominance of west and south.  

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It further stated that medical emergencies accounted for 35% of digital loans that were availed during the year. As two consecutive waves of the Covid-19 pandemic took a toll on the Indian healthcare system, there was a huge spurt in medical emergencies reported through the year. LenDenClub witnessed huge demand for credit for medical emergencies on its platform which also accounted as the top reason for borrowing. It was followed by ‘advance salary’ accounting for 33% and ‘family functions’ accounting for 10%.  

Salaried professionals ranging from CXOs to mid-managerial level, topped the chart as investors on the platform. The report further stated INR 1.81 lakhs was the average investment amount on the platform while INR 50,000 to 1 lakh was the most preferred amount among lenders, accounting to approximately 50% of the pie in terms of value. Owing to the festival season, November (2020) and December (2020) and February (2021) were the top three months when demand for credit was the highest. Whereas, during Apr-Jun 2020, the demand for credit was the least.  

In terms of loan repayment — ECS payment was the most preferred mode accounting for 83 % followed by UPI (10%) and NEFT (7%). In addition, the data also revealed that males continued to dominate the platform with more than 80% participation.  

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Bhavin Patel, Co-founder & CEO, LenDenClub said “Covid-19 has accelerated digital penetration and uptake across every industry, and the lending sector too, has seen transformation beyond imagination. During the global health crisis, medical emergencies continued to be the top reason for borrowing, and we are honoured to help those who lack credit or lie outside the financial inclusion fold, meet their needs. Interestingly, millennials also actively participated as investors availing P2P lending as an aspirational asset class offering lucrative returns. Thanks to e-commerce and penetration of new-age technology which has built an all-new tech empowered segment of Indians across tier-II and tier-III cities from where we witnessed fresh bouts of demand.”  

LenDenClub, the P2P platform that offers loans ranging from Rs. 5,000 to 10 lakhs, has analysed annual data of over 4 lakhs users, to study the key trends in industry. P2P is a fast growing and upcoming industry for alternative investment avenues. P2P NBFC is an RBI recognized lending platform which started picking up in India in the last few years. The report has multiple data points and key insights showing the typical demographic and professional profiling of the consumers. 

LenDenClub is the largest peer-to-peer platform in India, having disbursed more than ₹500 crores worth of loans. With a 100% funding record for its borrowers, LenDenClub currently enjoys a user base of one and a half million from all over India  and disburses an average of 2.5 lakh loans annually. LenDenClub, with usage of technology, disburses 82% loans within 5 hours to its borrowers. 

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